BoC raises overnight lending rate

BoC raises overnight lending rate

The Bank of Canada raised its key interest rate another 25 basis points Wednesday morning, making it the third increase since June.

BoC Governor Mark Carney’s move to increase the overnight lending rate from 0.75 per cent to 1 per cent suggests the bank is confident with Canada’s economic recovery and that monetary stimulus can be relaxed.

Still, Canadian gross domestic product (GDP) didn’t meet the bank’s expectations for the second quarter, rising only 2 per cent instead of 3 per cent.

Second quarter growth represents an even sharper decline compared to the previous quarter when GDP was 5.8 per cent.

5 Comments
  • Vipul Jasani 2010-09-10 3:39:17 AM
    I was expecting this in Q1 2011. Industry require some more time to recover. I expect full recovery in end of Q2 2011/ Early Q3 2011.
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  • George Janho 2010-09-10 5:15:48 AM
    BOC is going against all economic logic in increasing the prime rate, is it to scare small home buyers and induce them to switch from variable to fixed rates? whatever the reason behind the decision, it is not fighting the slow down and not helping the economy and the housing market in particular
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  • kashif toor 2010-09-10 10:12:44 AM
    Please, we need to increse sales , not to scare away people from purchasing, Keep rates low. no more than .25 percent. Bank Of Canada needs to reach out to the market to see what really is going on, making it hard and increasing the rate will not help anyone.
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